Blockbuster Busts Its Circuit City Offer

[Woochifer]

Looks like the merger will not go through after all. Led by Carl Icahn, Blockbuster had been pushing this deal for months, and Circuit City finally relented a few weeks ago. Now it seems that Blockbuster got a look at Circuit City's books, and decided to go Runaway Bride on everyone.

Blockbuster still wants to stock electronics items at its video stores, but for now, Circuit City won't be the partner handling that end of the biz. Radio Shack would seem like a more logical partner because their stores are much smaller, and although they lack Circuit City's media sales departments (which generate more regular store visits) that's not as much of an issue given that Blockbuster stores already sell DVDs.

In any case, Blockbuster is holding onto a lot of retail space with declining sales per square foot, while Circuit City's also sitting on a lot of empty space with all of the store expansions/relocations they'd been doing the past few years. I thought that BB's takeover bid was largely driven by CC's real estate and lease holdings (and Carl Icahn's history of acquiring companies in order to liquidate their assets), but I guess the value of CC's holdings and their operational issues did not pass muster.

http://www.informationweek.com/news/personal_tech/TV_theater/showArticle.jhtml?articleID=208802154

[GMichael]

Sounds like CC is ripe for a pool hall franchise to take them over. Pool and billiards on one side, DVD's and CD's on the other. (just keep those boom boxes from the car audio section turned down)

[Mr Peabody]

How about a merge of Block Buster and Starbucks? I heard BB changed their direction that way when SB decided to close several store locations. wink

I don't know if Radio Shack would be a good choice. They don't have their own brand any more in electronics, Blockbuster could simply pick up a few lines and do the same thing without merging with anyone. Of course, "picking up" does require a bit of cash or very good credit. If I were BB I'd forget the electronics and look for something not so competitive. Something that might actually make money. On the other hand, renting movies used to create a lot of foot traffic and if the TV and player were there on display they could get a bite now and then.

As far as CC, they created their mess and if they have any resources left they need to focus on what the customer wants and service to try to turn things around. Putting high school kids in there on minimum wage was stupid as was a total renovation of the store's interior in the middle of the Christmas selling season. I can't believe they landed Denon. I don't know what was on D&M's mind but they clearly don't care any more where their product ends up. What good are all of those installer high tech features built into the CI series for big box stores like CC? Oh well, I'm sure we've been through all this on a couple of threads, so I will stifle.

[kexodusc]

There was just too much downside and not enough upside to justify this merger - even Icahn's ambition couldn't turn water into wine.
Speculation's already begun on what Blockbuster's Plan B is.

I read comments on another site that basically suggest BluRay might be Blockbuster's saving grace if they help push it to market. It stands as one of the biggest potential advantages over the VOD industry that's chipping away - and even BluRay isn't a long-term solution.

[Woochifer]

How about a merge of Block Buster and Starbucks? I heard BB changed their direction that way when SB decided to close several store locations. wink

Would not surprise me at all if that's the direction they go in. Blockbuster's holding onto a lot of leases and properties, and a lot of floor space that they can potentially convert into higher and better uses. This is a case where both stores already attract significant foot traffic on their own, and the combination could increase revenues on both sides.


I don't know if Radio Shack would be a good choice. They don't have their own brand any more in electronics, Blockbuster could simply pick up a few lines and do the same thing without merging with anyone.

Actually, a few years ago Blockbuster already partnered with RS, developing some jointly operated combo stores and introducing some RS product sections into Blockbuster stores. They didn't perform as well as both companies had hoped, so that partnership got terminated. With Blockbuster now in decline, and RS repositioning their brand, it could be time to revisit a partnership.

Blockbuster can indeed pick up electronics items on their own, but the public associates Blockbuster with video rentals and would not think to go there to buy electronics, unless Blockbuster does a lot of marketing and reeducation. By putting the Circuit City or Radio Shack logo next to the Blockbuster sign, consumers would instantly know that they can find electronics items inside.


If I were BB I'd forget the electronics and look for something not so competitive. Something that might actually make money. On the other hand, renting movies used to create a lot of foot traffic and if the TV and player were there on display they could get a bite now and then.

I think Blockbuster's trying to make the foray into electronics retailing because they've got hardware plans of their own. They not only want to sell their own branded hardware at Blockbuster stores, but also at other retailers, whether that's Circuit City or Radio Shack.

Foot traffic is an asset to electronics sales. Video rentals might be in decline, but video stores will still attract far more people day in and day out than a store that strictly stocks electronics items. Best Buy basically cornered the CE market by successfully using the foot traffic generated by music, movie, and gaming media sales to sell hardware. If customers are already in a habit of going to Best Buy once a week or once a month to buy new movie and music releases, then Best Buy doesn't have to lift a finger to get that customer into their stores when the customer is ready to make a big ticket purchase, since he/she already goes there. Before Best Buy began their national expansion, Circuit City stores did not carry CDs or movies. Best Buy's growth forced CC to add media sections to their stores.


As far as CC, they created their mess and if they have any resources left they need to focus on what the customer wants and service to try to turn things around.

Actually, Best Buy created their mess. Circuit City stores have traditionally been only about 1/5 the size of Best Buy stores, which makes it hard for them to compete. In recent years, they've been moving their existing locations into newer and larger stores, but this leaves them with a lot of leases and underutilized property on the books


Putting high school kids in there on minimum wage was stupid as was a total renovation of the store's interior in the middle of the Christmas selling season.

Circuit City's decision to shift their sales staff from commission to hourly was again their response to competition from Best Buy, which has never paid its staff on commission. CC could have also downsized its stores and gone more in the direction of a specialty audio/video retailer, but I doubt that their shareholders would ever approve a plan that virtually guarantees major revenue declines and serves a narrow market that's currently in decline.

And that holiday renovation might affect one store in your area, but it certainly was not something done throughout the chain.


I can't believe they landed Denon. I don't know what was on D&M's mind but they clearly don't care any more where their product ends up.

If D&M wants to grab market share from Harman International, what better way than to push Harman out of their largest retail partner? What D&M cares about is that their product ends up somewhere. If you look at the home audio landscape, it's not a pretty picture. In Cali, two of D&M's biggest retail dealer networks (Good Guys and Tweeter) have closed up shop over the last three years, and numerous independent shops that stock Denon products in my area have either disappeared or are struggling.

In these market conditions, it would be downright suicidal for D&M to suddenly get restrictive and picky about who carries their products. Except for McIntosh, they're not a high margin, low volume company -- they are a collection of mid level brands that sell to the mass market. If they're concerned about image, they can always contractually specify how the product is to be displayed and promoted. Just look at how Denon's sold at Best Buy -- their higher end products are only displayed at locations with Magnolia Home Theater ministores.


What good are all of those installer high tech features built into the CI series for big box stores like CC? Oh well, I'm sure we've been through all this on a couple of threads, so I will stifle.

If CC's smart, they will offer installer services for anyone who wants to use those features, if they don't already. In case you don't know, the Magnolia Home Theater stores inside Best Buy offer installer services (their standalone locations also have design and contractor services available). And they now do ISF video calibration, among other things.

[Mr Peabody]

[QUOTE=Woochifer]Would not surprise me at all if that's the direction they go in. Blockbuster's holding onto a lot of leases and properties, and a lot of floor space that they can potentially convert into higher and better uses. This is a case where both stores already attract significant foot traffic on their own, and the combination could increase revenues on both sides.

* Plus Starbucks has landed a couple exclusive album sales deals like McCartney. But Blockbuster was in the music biz once and left about as fast as it entered.

Actually, a few years ago Blockbuster already partnered with RS, developing some jointly operated combo stores and introducing some RS product sections into Blockbuster stores. They didn't perform as well as both companies had hoped, so that partnership got terminated. With Blockbuster now in decline, and RS repositioning their brand, it could be time to revisit a partnership.

* What is RS repositioning? They carry a few accessories that are still their own brand but everything else are brands you can get any where, Sony, RCA, Monster, Go Video etc. If I remember correctly they closed some stores not long ago too, so I'm sure they would be open to any reasonable idea that might boaster their business.

Blockbuster can indeed pick up electronics items on their own, but the public associates Blockbuster with video rentals and would not think to go there to buy electronics, unless Blockbuster does a lot of marketing and reeducation. By putting the Circuit City or Radio Shack logo next to the Blockbuster sign, consumers would instantly know that they can find electronics items inside.

* Good point

I think Blockbuster's trying to make the foray into electronics retailing because they've got hardware plans of their own. They not only want to sell their own branded hardware at Blockbuster stores, but also at other retailers, whether that's Circuit City or Radio Shack.

* That's interesting but I have to wonder why, and it's more than a little risky. However, if they got on board with either the keyosk machines or downloads, or offered some kind of On Demand service this could certainly create a reason to offer their own brand and open the door for electronics expansion into other products.

Foot traffic is an asset to electronics sales. Video rentals might be in decline, but video stores will still attract far more people day in and day out than a store that strictly stocks electronics items. Best Buy basically cornered the CE market by successfully using the foot traffic generated by music, movie, and gaming media sales to sell hardware. If customers are already in a habit of going to Best Buy once a week or once a month to buy new movie and music releases, then Best Buy doesn't have to lift a finger to get that customer into their stores when the customer is ready to make a big ticket purchase, since he/she already goes there. Before Best Buy began their national expansion, Circuit City stores did not carry CDs or movies. Best Buy's growth forced CC to add media sections to their stores.

* That was a smart stradegy on BB's behalf to create more consistent foot traffic

Actually, Best Buy created their mess. Circuit City stores have traditionally been only about 1/5 the size of Best Buy stores, which makes it hard for them to compete. In recent years, they've been moving their existing locations into newer and larger stores, but this leaves them with a lot of leases and underutilized property on the books
Circuit City's decision to shift their sales staff from commission to hourly was again their response to competition from Best Buy, which has never paid its staff on commission. CC could have also downsized its stores and gone more in the direction of a specialty audio/video retailer, but I doubt that their shareholders would ever approve a plan that virtually guarantees major revenue declines and serves a narrow market that's currently in decline.

* A revenue decline would be better than going under all the way. I don't see how creating an unknowledgeable and non-motivated sales staff helps either chain. I also wonder if competition is the reason for all of CC's moves. It didn't stop CC from dropping out of appliance sales. I feel if I have to help myself and answer all my own questions I might as well buy from the internet and have the product dropped on my door step. CC and BB both shoot themselves in the foot by being nothing more than a warehouse. So can they stay alive with the sale of impulse and small ticket sales? I guess time will tell. They give absolutely no incentive to go into their stores. If CC would have stayed on commission and trained their staff I think they would have the edge right now. There is a lot of new technology coming out and most people get misinformed at these stores or have to figure things out for themselves.

And that holiday renovation might affect one store in your area, but it certainly was not something done throughout the chain.

* The holiday renovation was done throughout the chain. It wasn't last year but the first year after they appointed their last CEO. He came under fire for this and a few other lame ideas.

If D&M wants to grab market share from Harman International, what better way than to push Harman out of their largest retail partner? What D&M cares about is that their product ends up somewhere. If you look at the home audio landscape, it's not a pretty picture. In Cali, two of D&M's biggest retail dealer networks (Good Guys and Tweeter) have closed up shop over the last three years, and numerous independent shops that stock Denon products in my area have either disappeared or are struggling.

* That makes sense.

In these market conditions, it would be downright suicidal for D&M to suddenly get restrictive and picky about who carries their products. Except for McIntosh, they're not a high margin, low volume company -- they are a collection of mid level brands that sell to the mass market. If they're concerned about image, they can always contractually specify how the product is to be displayed and promoted. Just look at how Denon's sold at Best Buy -- their higher end products are only displayed at locations with Magnolia Home Theater ministores.

If CC's smart, they will offer installer services for anyone who wants to use those features, if they don't already. In case you don't know, the Magnolia Home Theater stores inside Best Buy offer installer services (their standalone locations also have design and contractor services available). And they now do ISF video calibration, among other things.

* I agree that CC should do that and I don't know if they do. I'm sure they were forced to by now. A few years back I was in CC looking at something and a guy was quite hot because he bought a couple thousand dollars worth of gear and couldn't get it hooked up and was telling the manager he was bringing it back. I wasn't aware BB did any of that. I wonder if they know what they are doing?

[nightflier]

I always thought that Starbucks and Barnes & Noble would be a natural fit. They already carry SB coffee in many of the B&N stores, so why not merge?

Coffee and movie rentals? I don't see that happening. Now, liquor and movies, that would be a better fit.

[bobsticks]

Sounds like CC is ripe for a pool hall franchise to take them over. Pool and billiards on one side, DVD's and CD's on the other. (just keep those boom boxes from the car audio section turned down)


I always thought that Starbucks and Barnes & Noble would be a natural fit. They already carry SB coffee in many of the B&N stores, so why not merge?

Whatever their decision, they do need to think outside the envelope. And, Wooch is right on the money with BB having that weekly foor traffic market cornered so they may need to look elsewhere.

When we opened the bar up north the location, one block off campus, was integral to success. But, just as valuable, were the neighbors that we chose (we owned the strip). We had a laundromat and a tanning salon on either side...in a college town...fuggedabowdit. Most bars/restaurants take three years to fully pay off---we did it in six months, we kept operations lean like a nightclub but were open all day. Even I was amazed at how many sorority girls will stop in midday for a pitcher and some cheesesticks...and where there are hot girls, guys will soon follow. Next thing you know, even in the face of some serious competition in what could be considered a saturated market, we're pullin' in thirty or fourty thousand a night. I shudder to think what how them boys are livin' high on the hog these days...

Most market majors seem to forget that time is the ultimate commodity. Even before $4 a gallon gas you had to give reason and convenience in addition to location..."Build it and they will come' isn't always true, and in fact, it rarely is.

[Woochifer]

* Plus Starbucks has landed a couple exclusive album sales deals like McCartney. But Blockbuster was in the music biz once and left about as fast as it entered.

I just read a Fortune profile of Howard Schultz. Apparently, Starbucks has decided to strip down its operations and refocus on coffee. They're going to jettison a lot of their cobranded products, including their music division. Seems that the music division has turned into an albatross over the past year, and Starbucks is going to outsource its music operations and reduce the selections available at their stores.

I remember that Blockbuster created those Blockbuster Music stores by acquiring regional music store chains. In SoCal, all of the Blockbuster Music stores were former Music Plus locations. Those did not last very long, as there were already plenty of stores selling a limited selections of overpriced CDs.


* What is RS repositioning? They carry a few accessories that are still their own brand but everything else are brands you can get any where, Sony, RCA, Monster, Go Video etc. If I remember correctly they closed some stores not long ago too, so I'm sure they would be open to any reasonable idea that might boaster their business.

They repositioned their stores by devoting less floor space to electronics parts and hobbyist items. They also got rid of a lot of their house brands (Realistic, Archer, etc.). They're also stocking more higher margin items than before (e.g., cell phones, iPod accessories, computer components, etc.). What Radio Shack has always offered is lots of small stores in every corner of the country. I view it as a 7-11 for electronics items. Sure, you can find most of those items elsewhere, but it's convenient to just drop in, find what you want, and get out without having to fight the crowds at a big box store. And in rural areas, the local Radio Shack is often the only place in town where you can find things like hearing aid batteries and video cables.

* That's interesting but I have to wonder why, and it's more than a little risky. However, if they got on board with either the keyosk machines or downloads, or offered some kind of On Demand service this could certainly create a reason to offer their own brand and open the door for electronics expansion into other products.

Rumor is that Blockbuster wants to sell a set top device to compete with Apple TV. Problem is that the train is already leaving the station with the Netflix Roku box getting unveiled last month, and Apple continuing to improve on Apple TV. The other problem is that this market has thus far proven very limited. Apple TV's doing okay, but not great and the interest in Netflix's box is yet to be seen.


* That was a smart stradegy on BB's behalf to create more consistent foot traffic

It will be tough for competitors like CC because BB expanded using very large stores of up to 100,000 SF. CC's average store size was around 20,000 SF, but even their newer stores designed from the ground up to carry games, music, and movies, are only about 50,000 SF.

A friend of mine who worked at Good Guys said that those stores did not make a lot of money selling video games, but when GG got rid of their video game sections to focus on audio/video products, the foot traffic went down and so did sales on their other products. GG wound up bringing video games back, along with a limited selection of DVDs and CDs, but they went belly up not too long thereafter.


* A revenue decline would be better than going under all the way. I don't see how creating an unknowledgeable and non-motivated sales staff helps either chain. I also wonder if competition is the reason for all of CC's moves. It didn't stop CC from dropping out of appliance sales. I feel if I have to help myself and answer all my own questions I might as well buy from the internet and have the product dropped on my door step. CC and BB both shoot themselves in the foot by being nothing more than a warehouse. So can they stay alive with the sale of impulse and small ticket sales? I guess time will tell. They give absolutely no incentive to go into their stores. If CC would have stayed on commission and trained their staff I think they would have the edge right now. There is a lot of new technology coming out and most people get misinformed at these stores or have to figure things out for themselves.

Problem is that even when CC had commissioned sales staff, they weren't very well informed or trained then either. The best commissioned sales reps on the audio/video side did not work for CC. They worked for the specialty chains that stocked higher end products, with higher commissions per transaction. CC's kind of caught in the middle -- they're not really a specialty chain like Magnolia or Tweeter, which actually trains their sales staff; and they're not really Best Buy either. In the end, they had to go with the strategy that lowered their costs.

I don't think BB has shot themselves in the foot at all. They went national with a specific strategy and store prototype. They acquired Magnolia Hi-Fi to learn how to market to higher end customers, and once they did that, they expanded the Magnolia brand into Best Buy stores. As a business model, they have been very successful, and continued to expand into new markets. By calling their stores nothing but warehouses, you're disregarding their Magnolia division, which is higher end than anything CC is offering.

As far as incentive to go into stores go, looks like you don't follow DVD and CD release schedules. Tuesday is one of the busiest days of the week at BB and CC, because that's when the new releases hit the shelves. It's also on the day/week of release that those titles carry the low loss leader pricing and have other exclusive bonuses attached. For collectors, those stores offer up plenty of inducements to attract customers. This gets those customers into the habit of visiting the stores on practically a weekly basis. When those customers are ready to buy a big screen TV or AV receiver, where will they go first? The specialty audio/video store, or the BB/CC store that they already visit every week? I'm not saying that customers won't go to a store that provides better service and higher end product offerings, but Best Buy already has that customer in their store every Tuesday.


* I agree that CC should do that and I don't know if they do. I'm sure they were forced to by now. A few years back I was in CC looking at something and a guy was quite hot because he bought a couple thousand dollars worth of gear and couldn't get it hooked up and was telling the manager he was bringing it back. I wasn't aware BB did any of that. I wonder if they know what they are doing?

I think CC was slow to get into the installer services. They created the Firedog desk at their stores to compete with BB's Geek Squad, but I think Firedog also offers up services for home theater installation. BB has had installer services for years. More recently, they've expanded that list of services to also include ISF calibration.

As with a lot of their offerings, I think goes back to their acquisition of Magnolia Hi-Fi. Even before BB bought the company, Magnolia recognized a long time ago that audio/video dealers would not survive just on component sales, so they began offering design and installation services. Near their Seattle headquarters, they have a dedicated showroom for media room design and contractor services. Now BB is using that expertise to move into the higher end markets. That's why they now push the $200 ISF calibrations, HDTV wall mounting, and network cabling services -- that's high margin, and more profitable than equipment sales.

[Mr Peabody]

Not many BB stores in this area have the Magnolia. I know of one but haven't had an opportunity to go in. There's two other BB near me and I've gone with other people who wanted to shop TV's or whatever. We've been offered deals on cable TV or promo subscriptions to music downloaders but no one ever mentioned they could put the TV on the wall for us or other installer services. Do you think this type of thing is only in large markets? I haven't been to other cities to see what their BB's are like but the one you describe is different than those in my area. I have to say though that the management of BB must stay on their sales staff because when I am in there some one usually will ask if they can help. I was in CC only about a week ago looking for speakers stands for an application and I was about to give up and leave before any one asked me if I need help. Of course, this is like eating out, your service will always vary depending on who is working.

You are right, I usually will rent before I buy a movie. I won't buy one I don't think I would enjoy seeing over again. I know Wal-Mart usually will sell some DVD's at $15.00 or so the first week of release but I didn't know BB or CC did. When I've been in their stores locally the movies have been full retail which got me to buying from Amazon.

I like Radio Shack and hope they continue to do well. I try to give my local RS biz when I can because the guys there are usually really helpful. The only complaint I have about them is you really have to watch their flyers for stuff you might want. They offer great deals when something is on sale but if you miss it, you are SOL unless it goes back on sale because they aren't budging from the return to retail price. It's hard to pay $20.00 more for something you know was less last week :)

[pixelthis]

Regardless of the players, this goes back to what was stated in the article by steve Guttenberg that I posted a link to.
Mainly that high end audio is in trouble, and the coming reccession doesnt help things at all.
To a lot today "audio" is a HTIB, or a bunch of cheap crap that is disposable.
Some are amazed at the price of even my modest system, even more amazed when they hear it, but not enough to get into it
The rock and roll revolution turned a nich hobby into a mainstream activity.
now that activity is in trouble, it used to be a part of the atmosphere, now you have to look for audio gear.
If it werent for HT carrying the load, we would all be building our own gear, like they did in the fifties.
And we may be doing that again, AND SOON.
aS FOR THE SHACK, they have never had a product line, save some speakers made in of all places, Korea.
They had some rather nice receivers, made by Pioneer, like the one below.
Such a receiver was my first "serious" piece of gear.:1:

[pixelthis]

BTW notice that the realistic(considered inexpensive) was 399$, about 1200
or more in todays dollars, with fifty watts for channel:1:

[Mr Peabody]

Where I lived as a teen the only electronics store around was Radio Shack so my first receiver ended up being a Realistic. It was slightly over $200.00 and was rated at 22x2. I kept it for years and it worked without a flaw. It was in a beautiful walnut case with a black face. This was back when silver was the finish of the day. My first lesson in audio is when I sold it and bought a space age looking Pioneer rated at 45x2. Ooooo.... cool and more power. The Pioneer was bright and had no balls. (Mental note to self, I probably should start listening to this gear before buying and newer fancier isn't always better, also something must be wrong with these power ratings) I was poor back then but always wish I had kept that first receiver for reference and sentimental purposes. Well, also I wish I had kept it because I realized my so called upgrade wasn't an upgrade at all. The Realistic was discrete and I imagine that Pioneer was one of the first that started using IC chips.

From what I understand Realistic's receiver line was built from several different manufacturer's designs. In other words they didn't design anything on their own but copied off others. I'm assuming with permission. This is just what I was told I have no idea if it's true.

I remember drooling for a pair of Mach Ones every time I went into RS. As a teen I thought those big woofers were the shtuff.

[pixelthis]

Where I lived as a teen the only electronics store around was Radio Shack so my first receiver ended up being a Realistic. It was slightly over $200.00 and was rated at 22x2. I kept it for years and it worked without a flaw. It was in a beautiful walnut case with a black face. This was back when silver was the finish of the day. My first lesson in audio is when I sold it and bought a space age looking Pioneer rated at 45x2. Ooooo.... cool and more power. The Pioneer was bright and had no balls. (Mental note to self, I probably should start listening to this gear before buying and newer fancier isn't always better, also something must be wrong with these power ratings) I was poor back then but always wish I had kept that first receiver for reference and sentimental purposes. Well, also I wish I had kept it because I realized my so called upgrade wasn't an upgrade at all. The Realistic was discrete and I imagine that Pioneer was one of the first that started using IC chips.

From what I understand Realistic's receiver line was built from several different manufacturer's designs. In other words they didn't design anything on their own but copied off others. I'm assuming with permission. This is just what I was told I have no idea if it's true.

I remember drooling for a pair of Mach Ones every time I went into RS. As a teen I thought those big woofers were the shtuff.


IT WAS BADGE ENGINEERING.
Look at the picture I posted, that is a pioneer receiver with a realistic logo, even down to the rocker switches.
THAT FIRST "REALISTIC" YOU BOUGHT was a Pioneer, and you traded for a pioneer.
:1:

[Mr Peabody]

I was looking to see if I could find out who built the Realistic stuff and I didn't find exactly what I was looking for. I did see where others mentioned the Pioneer clones. The Radio Shack history just says they had their gear built in Japan. Here's one article that at least shows Pioneer did not built all the components.


http://www.antiqueradio.com/Feb07_RadioShack_Tesla.html

[Woochifer]

I was looking to see if I could find out who built the Realistic stuff and I didn't find exactly what I was looking for. I did see where others mentioned the Pioneer clones. The Radio Shack history just says they had their gear built in Japan. Here's one article that at least shows Pioneer did not built all the components.


http://www.antiqueradio.com/Feb07_RadioShack_Tesla.html

This is not much different than Sears' Kenmore brand -- different model lines/generations can potentially use different outsource manufacturers. I recall that Radio Shack's turntables at one point were made by BIC. Later on, Radio Shack started selling a lot of rebranded RCA gear. Don't remember who made their famous Mach One speakers, but I thought they were made by an American company.

[Woochifer]

Not many BB stores in this area have the Magnolia. I know of one but haven't had an opportunity to go in. There's two other BB near me and I've gone with other people who wanted to shop TV's or whatever. We've been offered deals on cable TV or promo subscriptions to music downloaders but no one ever mentioned they could put the TV on the wall for us or other installer services. Do you think this type of thing is only in large markets? I haven't been to other cities to see what their BB's are like but the one you describe is different than those in my area. I have to say though that the management of BB must stay on their sales staff because when I am in there some one usually will ask if they can help. I was in CC only about a week ago looking for speakers stands for an application and I was about to give up and leave before any one asked me if I need help. Of course, this is like eating out, your service will always vary depending on who is working.

Magnolia operated primarily in the Northwest. They only expanded into California after BB acquired them. Once Magnolia began to successfully compete with regional chains like Good Guys and Tweeter (both of whom would eventually get knocked out of the west coast market by Magnolia), BB began opening Magnolia outlets inside of the BB stores.

The expansion has been market by market. In Cali, only a few BB stores added the Magnolia ministores at first. The standalone Magnolia stores are now primarily media room installation showrooms, and display fewer components than before. Eventually, BB kept adding stores until now the majority of the BB stores in Cali now have a Magnolia section. I know that back east, the Magnolia sections only got added to the higher profile BB locations at first.


I like Radio Shack and hope they continue to do well. I try to give my local RS biz when I can because the guys there are usually really helpful. The only complaint I have about them is you really have to watch their flyers for stuff you might want. They offer great deals when something is on sale but if you miss it, you are SOL unless it goes back on sale because they aren't budging from the return to retail price. It's hard to pay $20.00 more for something you know was less last week :)

Like I said, I view RS in the same light as 7-11. They might overlap with larger stores and some items might cost more, but it's a matter of convenience. Sometimes I just prefer to shop at a smaller more laidback store, especially if I only need a small item and don't want to trek down to BB or Target and fight the crowds. I just can't imagine too many towns without a Radio Shack location.

I've also worked in small towns where the local Radio Shack is the only place in town to find a lot of things city dwellers take for granted like wireless network cards, headphone adaptors, and HDMI cables. One of those rural Radio Shack locations also doubles as the town's only video store.